International Journal of Business Management and Research(IJBMR) ISSN(P): 2249–6920; ISSN(E): 2249–8036 Vol. 10, Issue 2, Apr 2020, 1–12 © TJPRC Pvt. Ltd.
A STATISTICAL ANALYSIS OF NON-PERFORMING ASSETS AND THE EFFECTIVENESS OF VARIOUS RECOVERY CHANNELS IN SCBs ARJUN GUPTA School of Open Learning, University of Delhi, Delhi, India ABSTRACT The banking industry serves as a stanchion in the growth of the nation. It mobilises deposits and gives credit to variegated sectors in the country. This sector collects surplus funds from customers and channelizes the same in the form of loans. As it has a vital role in the growth of other sectors, it needs to be flourishing rather than unthriving. Considering the latter, this research paper attempts to focus on one of the major cause to be blamed, for the crumbling state of the Indian banking sector today i.e the Non-Performing Assets (NPAs), its link with certain factors impacting the financial health, and its recovery in the context of SCBs in India. The paper has four parts. The first part is all about brief discussion on NPAs and its various recovery channels. The second part presents a contrast between Net NPA and Gross NPA and further linking it with the profits.
Finally this paper is concluded with suggestions on avoidance and management of NPAs. KEYWORDS: Non Performing Assets (NPAs), Schedule Commercial Banks (SCBs), SARFAESI ACT(2002), DEBT RECOVERY TRIBUNAL (DRTs) & LOKADALATS
Received: Feb 10, 2020; Accepted: Mar 02, 2020; Published: Mar 23, 2020; Paper Id.: IJBMRAPR20201
Original Article
The third part dwells on the recuperation of NPAs through Lok Adalats, Debt Recovery Tribunals & SARFAESI act.
INTRODUCTION Non Performing Assets The non performing assets can be defined as An asset, including a leased asset, becomes non performing when it ceases to generate income for the bank. An NPA may be a loan or an advance where •
Interest and/or installment of principal remain overdue for a period of more than 90 days in respect of a term loan.
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The account remains ‘out of order’ in respect of an Overdraft/Cash Credit (OD/CC).
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The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted.
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The installment of principal or interest remains overdue for two crop seasons for short duration crops.
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The installment of principal or interest remains overdue for one crop season for long duration crops
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In respect of derivative transactions, the overdue receivables representing positive mark-to-market value of a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for
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